A Comprehensive Framework for Long-Term Resiliency Investment Planning under Extreme Weather Uncertainty for Electric Utilities
This work addresses capital planning challenges for electric utilities facing extreme weather, but it is incremental as it extends existing frameworks with new components.
The paper tackles the problem of long-term resiliency investment planning for electric utilities under extreme weather uncertainty by developing a four-part framework incorporating weather uncertainty, a digital twin, Monte Carlo simulation, and multi-objective optimization. It finds that a simpler net present value ranking method outperforms more complex grid-aware optimization methods in finding optimal portfolios with limited grid knowledge.
Electric utilities must make massive capital investments in the coming years to respond to explosive growth in demand, aging assets and rising threats from extreme weather. Utilities today already have rigorous frameworks for capital planning, and there are opportunities to extend this capability to solve multi-objective optimization problems in the face of uncertainty. This work presents a four-part framework that 1) incorporates extreme weather as a source of uncertainty, 2) leverages a digital twin of the grid, 3) uses Monte Carlo simulation to capture variability and 4) applies a multi-objective optimization method for finding the optimal investment portfolio. We use this framework to investigate whether grid-aware optimization methods outperform model-free approaches. We find that, in fact, given the computational complexity of model-based metaheuristic optimization methods, the simpler net present value ranking method was able to find more optimal portfolios with only limited knowledge of the grid.